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China’s rural consumers buy more online

July 16, 2015 05:28 PM

Online shopping is catching on in the rural villages of China. In fact, online purchasing by rural residents grew 18% faster than that of city residents last year, according to a research report just released by Alibaba Group.

In the first quarter of this year purchases from rural residents represented 9.64% of sales on Alibaba’s big Chinese online marketplaces, Taobao.com and Tmall.com, compared with 8.65% two years ago, according to the report. The report says the major market drivers are increasing Internet penetration and income in villages where there are relatively few bricks-and-mortar stores.

Rural shoppers are also catching up in adopting new technology, such as mobile shopping. The report says purchases on mobile devices from shoppers in rural areas increased 250% last year.

The less economically developed a region, the faster the growth in online shopping, Alibaba says. Of the 100 Chinese towns where online shopping is growing the fastest, 75 of them are in the northwest of China, where incomes are far lower than on the country’s eastern coast.

Besides buying online, rural residents and merchants also sell online. The reports says last year there were more than 300 towns where the online sales of local merchants surpassed 100 million yuan ($16 million).

Contributing to this e-retail boom, Alibaba has built service centers in 1,803 villages where employees help consumers to search for products online and place orders. That allows consumers without Internet access or who do not know how to place an online order shop web sites, Alibaba says. In 2014, Alibaba announced plans to invest 10 billion yuan ($1.6 billion) to build 100,000 service centers in rural areas in China in five years.

E-commerce from rural areas in China is becoming a big business. Orders from rural areas resulted in the delivery of 4.5 billion parcels in 2014. The number of Chinese online shoppers who live outside of cities has topped 77.14 million in 2014, a 40.6% increase from a year earlier, the report says.

“China has about 570,000 villages,” Alibaba Group senior president Jin Jianhang says, “and we want to help all the shoppers in those areas, like consumers in large Chinese cities, enjoy fast and convenient e-commerce services in the near future.” .